Dov Charney has lamb-chop sideburns, a lemon-yellow T-shirt, red tracksuit jacket, light-blue Levi's Sta-Prest trousers and big 1970s sunglasses. He looks, and moves, a bit like Animal, the manic drummer in the Muppets.

Charney's fans have no problem identifying him. Inside the store you can see him on video monitors talking about his company, American Apparel. And his face is cropping up more and more often in the American media.

His company is centre stage in one of the hot topics this election year. As most of its rivals have shipped work overseas, American Apparel has built the largest garment factory in the United States.

Now he is rapidly expanding a chain of shops that he hopes will allow his company to rival Gap. The Canadian-born entrepreneur plans to have six shops in London, with the first two opening in Covent Garden and Carnaby Street by the summer.

Changing the world one T-shirt at a time is a tall order, but Charney is a force of nature and already has some heavyweight fans. Hillary Clinton chose his company to make her campaign T-shirts, and Jesse Jackson has just been on a tour of his Los Angeles factory.

American Apparel sells casual clothes in cool colours cut with an "old-school" 1970s feel. Running against the current high-street trend for constant, ever-faster change, the company sells the same styles all year round.

Charney said he aimed to sell "classics" year after year, and would not update his collection after every fashion show.

Labels are found only on the inside of the garments. But what makes American Apparel really different is the last line on those labels. It reads "Made in USA".

These days, even highly paid computer technicians are finding their jobs transported overseas in a process known as "offshoring". The trend is one of the US's hottest political topics.

In America, the threat to middle-class jobs has made the subject mainstream, but most garment workers in the US and Britain lost their jobs to cheaper offshore labour years ago as companies sought to cut costs.

More than 30,000 American textile jobs have gone in the past two years. Tens of thousands more have been lost in Britain since the late 1990s. It is now almost impossible to buy a pair of jeans that were made from start to finish in America.

In his Los Angeles factory, Charney pays his predominantly Hispanic workers an average of $11 (£5.95) an hour [actual wage as of Jan. 2004: $12.50/hour]. He also provides health insurance, paid holidays and free English classes.

In an industry notorious for its shabby treatment of workers, the company's favourable working conditions are far from the norm.

Indeed, Charney has critics and rivals on the left who claim he is a union basher. One competitor recently compared him to "a good plantation owner".

"F****** liberal faggots," said Charney. "Let's see their sales figures." He said he wants to be judged against his commercial rivals.

Gap, Hennes & Mauritz and even Marks & Spencer do most of their manufacturing overseas, despite a public backlash.

Warren Buffett, the world's richest investor, is a backer of Fruit of the Loom, which in recent years has transferred thousands of jobs from Ireland to Morocco.

Charney said they had all got it wrong, economically as well as ethically. It did not matter how low a company's labour costs were if nobody wanted its products.

"Warren Buffett would have been better off buying us," he added. "American Apparel will be worth more than Fruit of the Loom in a couple of years."

The London shops will initially be supplied from Los Angeles, but eventually he hopes to have enough stores and sales to justify opening a manufacturing site in Europe.

"My labour cost in LA is about 60 cents a T-shirt. In a prison in China it's zero cents. But when you're selling T-shirts for £18, what is 60 cents? It's nothing."

Charney reeled off a list of factors that he believes fooled companies into making the leap offshore — globalisation, the fax, the internet, DHL, Federal Express, falling trade barriers.

"Offshore seemed like a new frontier. It was like the next logical step," he said. "But people overlooked what kind of savings could be made on doing things closer to home."

Last year American Apparel had sales of $80m, and Charney expects them to double this year. His next big test will be London.

Richard Hyman at Verdict, a retail-research agency, said that American companies had often underestimated the difficulties they would face in a smaller market, where rents were higher and competition fierce.

So what does American Apparel have to offer Britain? "Great clothes, fairly priced and fairly made," said Charney.